UNEMPLOYMENT COMPENSATION in LABOR DISPUTES by HERBERT A

UNEMPLOYMENT COMPENSATION IN LABOR DISPUTES By HERBERT A. FIERSTt and MARJORIE SPECTORt OPPOSITION to the principles of unemployment insurance on constitu- tional and philosophical grounds seems to have subsided to wistful reminiscing.' Now that the various state systems have been paying benefits, many of them for two years, - the most important problem remaining is that of studying the operation of these systems with the purpose of correcting deficiencies which have lately become manifest. This Article will examine the administrative adjudication of contested claims for benefits where loss of employment was due to a labor dispute. Though denial of benefits for connection with a labor dispute is only one of several grounds for disqualifying claimants who have worked in covered employment,3 it is the most significant from the point of view of an immediate and direct effect upon the interests of organized labor. Of the fifty-one states and territories with unemployment insurance laws, forty-one copied in most respects the labor dispute disqualification clause of the Social Security Board Draft Bill,' while the others devised 1Member of New York Bar. i-Economist, Bureau of Research and Statistics, New York Division of Placement and Unemployment Insurance. 1. The decisive blows were dealt by the Supreme Court in Cartmichael v. Southern Coal Co., 301 U. S. 495 (1937) and Stexard Machine Co. v. Davis, 301 U. S. 548 (1937). The case for the opposition is summarized by the dissents of Sutherland, J., in the Car- incchael case, and of McReynolds, Sutherland and Butler, JJ., in the Dazis case. 2. Benefits first became payable in one state (Wisconsin) in July, 1936; in 22 states, in January, 1938; in 2 states, in April, 1938; in 3 states, in July, 1938; in one state, in September, 1938; in 2 states, in December, 1938; in IS states, in January, 1939; and in the last 2 states, in July, 1939. 3. See note 11 infra. 4. "Sec. 5. An individual shall be disqualified for benefits--(d) For any weeh with respect to which the commissioner finds that his total or partial unemployment is due to a stoppage of work which exists because of a labor dispute at the factory, establishment or other premises at which he is or was last employed: Pr:'idcd,That this subsection shall not apply if it is shown to the satisfaction of the commissioner that- (1) He is not participating in or financing or directly interested in the labor dispute which caused the stoppage of work; and (2) He does not belong to a grade or class of workers of which, immediately before commencement of the stoppage, there were members employed at the premises at which the stoppage occurs, any of whom are participating in or financing or directly interested in the dispute: fProvided, That if in any case separate branches of work which are commonly con- ucted as separate businesses in separate premises, are conducted in separate departments of the same premises, each such department shall, for the purpose of this subsection, b2 deemed to be a separate factory, establishment, or other premises./ SoctAL Sucvarn. BoARD, DRAFT BnLs FOR STATE UNEMPLOY"M1ENT Co01MPsFSATION OF Peorm Fu:.n AmD 461 THE YALE LAW JOURNAL (Vol. 49: 461 their own formulae, either wholly or in part.' The lack of uniformity in detail should not obscure the principle common to each of the systems: disqualification of otherwise eligible claimants whose loss of employment is due to a labor dispute. In elaborating and implementing this principle, the state laws embody three significant and overlapping variables: the duration of the disqualification, the character of the labor dispute, and the demarcation of the claimants involved in the dispute. The disqualification period is generally for the entire duration of the stoppage of work; only six acts establish a maximum disqualification period, and the shortest is three weeks in addition to the normal waiting period.' With regard to the character of the labor dispute, the great majority of states recognize no distinction between strikes and lockouts and make no provision for investigating the merits of the controversy. Reference is usually made, as in the Draft Bill, to "stoppage of work which exists because of a labor dispute." Yet, seven statutes seem to disqualify only for stoppage due to strikes;' and one of these, along with two other states, allows compensation if the commission, upon investigation, finds that the labor dispute was the fault of the employer, either because he violated a collective agreement or a relevant state or 8 federal law, or because he provoked the strike. EMPLOYER RESERVE ACCOUNT TYPES (Rev. ed. Jan. 1937). This provision was bor- rowed, with only slight alterations, from the one in the British Unemployment Insur- ance Act, 1935, 25 GEO. V, c. 8, §26-(1). For a list of states following this bill, see APPENDIX, infra p. 491. 5. Alabama [§ 6B(a)], California [§ 56(a)], Delaware [§ 5(d)], District of Colum- bia [§ 10(a) (6)], Kentucky [§ 9(b) (4)], New York [§ 504.2(b)], Ohio [9 6c], Penn- sylvania [§ 401(e)], Utah 1§ 5d], Wisconsin [§ 108.04(5) (a)]. 6. Alaska [§ 5 (d)] (8 weeks); Louisiana [ 4 (d)] (10 weeks) ; New York [N 504.2 (b)] (10 weeks) ; Pennsylvania [§ 401 (e)] (3 weeks in addition to normal waiting period) ; Rhode Island [§ 7 (4)] (8 weeks in addition to normal waiting period); Tennessee [§ 5 (d)] (four weeks). 7. California [9 56(a)] ("if he left his work because of a trade dispute") ; Colorado [§ 5 (d)] ("strike"); Kentucky [§ 9 (b) (4)] ("strike or other bona fide labor dispute" . "provided that for the purposes of this subsection a lock-out shall not be deemed a strike or a bona fide labor dispute and no worker shall be denied benefits by reason of a lock-out") ; Ohio [§ 6c] ("strike") ; Pennsylvania [§ 401 (e)] ("voluntary suspension of work resulting from an industrial dispute") ; Utah [§ Sd] ("strike"); District of Columbia [§ 10 (6)] ("strike or jurisdictional labor dispute"). However, California interprets its provision to include lock-out ("left his work" means "unem- ployed due to"; Unemployment Reserves Comm., May 3, 1938). And both Colorado and Pennsylvania intend to handle lockouts on the same basis as strikes. Communications from L. A. West, Chief of Benefit and Claims Section, Colorado Dep't Unempl. Comp. and Empl. Serv. (Dec. 5, 1939) ; and C. R. Davis, Special Deputy Att'y-Gen'l, Pa. Unempl. Comp. Bd. Rev. (Dec. 4, 1939). 8. Arizona [§ 5 (4)] (failure or refusal of employer to conform "to the provisions of any agreement or contract between employer and employee and any law of the State of Arizona or of the United States pertaining to hours, wages, or other conditions of work") ; Montana [§ 5 (d)] (failure or refusal of employer to conform "to the provi- 1940] UNEMPLOYMENT COMPENSATION Most important of these variables, in terms of numbers affected, is the delineation of those engaged in the proscribed activity. The forty- one statutes following the Draft Bill relieve a claimant from disqualification if neither he, nor any member of his grade or class of workers in the establishment, is participating in, financing or directly interested in the dispute.' However, the remaining ten states disqualify all claimants who have lost their employment by reason of a labor dispute."' Several reasons have recurrently been offered to justify disqualification for loss of employment due to a labor dispute. Most popular tradi- tionally has been the argument that unemployment insurance schemes are intended to insure only against involuntary unemployment.,1 Loss of employment due to a labor dispute is "voluntary" and therefore beyond the pale. A second argument balks at the thought of permitting the state to take an "unneutral" position in industrial relations by "financing" a labor dispute through unemployment insurance benefits.' 2 Coupled with this idea is a reluctance to lend any encouragement to strikes.3 And finally, some feel that it would be an ethical impropriety sions of any law of the State of Montana [which has no labor relations act] or of the United States pertaining to collective bargaining, hours, v.-ages or other conditions of work"); Utah [§ 5d] (failure or refusal of employer to conform "to the provisions of any law of the state of Utah or of the United States pertaining to hours, wages, or other conditions of work;" finding "that the employer, his agent, or representative, has con- spired, planned, or agreed with any of his workers, their agents, or representatives to foment a strike"). 9. See note 4 supra. 10. See note 5 supra. In these states, disqualification ensues even if the claimant, or any member of his grade or class, is not participating in, financing, or directly interested in the labor dispute. 11. See, for example, Declaration of State Public Policy in the Social Security Board Draft Bills (supra note 4), which has been followed by most of the states: ". the public good, and the general welfare of the citizens of this state require the enactment of this measure . for the compulsory setting aside of unemployment reserves to be used for the benefit of persons wicnployed through no fault of their ow:!' (Italics sup- plied). The principle of compensation for involuntary unemployment only, is further expressed in all laws but Pennsylvania's by the disqualification of claimants discharged for wilful misconduct; and in all but the New York law, for voluntary quitting without good cause. Similarly, disqualification ensues under every statute if the claimant is not ready, willing and able to accept suitable employment. 12. "The provisions of Sec. 5042 (b) of the Unemployment Insurance Lax, are in the nature of an assurance to the people of the state that the state ill not participate, inso- far as the provisions of this act may apply, in any industrial controversy during the first ten weeks thereof." New York, Appeal Board, 907-39 (Aug.

Load more